At press time, the cryptocurrency market is starting to recover losses from the last 48 hours. Although few altcoins are still struggling to remain in the green position, the large majority are slowly moving upwards.
Bitcoin short squeezers are extremely active
The benchmark Cryptocurrency Bitcoin is at this time, one of the highest daily gainers. With over 5% secured in daily gains, Bitcoin is trading at a price of $37,282, after hitting a high of $38k two days ago.
While the 7 days losses have corrected downwards, causing Bitcoin to shave off 4.60% this week, the market is gearing up for a much-needed rally, as spotted by on-chain analyst Williams Clemente.
Examining the Bitcoin shorts chart, Clemente noticed the meteoric speed with which the market shorted Bitcoin. The end result as he interprets from the chart could be a massive short squeeze dominating the Bitcoin market in the coming weeks. Any other possible outcome is, in his opinion, tied to another market observation that traders have made. Regardless, it is bullish for the Bitcoin market in the short term, and here’s exactly why.
There’s likely to be a short term bull run, thanks to short squeezers
A short squeeze in the Bitcoin market basically refers to the liquidation of short-sell orders in the futures market within a very short period of time.
Upon the liquidation of these short-term positions, short-sellers have no choice but to re-enter the market and buy back all their positions.
In the long term, the buying pressure reflects an increased demand for Bitcoin; an attractive position for the Bitcoin market at this time. As buying activities continue, the short positions are cleared off, and the long contract buyers make their way into the market.
Going forward, Bitcoin’s price could be pumped to higher levels. Meanwhile, another brewing trend highlights Bitcoin’s journey to stability. The same analyst spotted this, and as he noted in another tweet, long-term holders are beginning to unseat short-term selling.
“Note: -Some of this movement of supply from STH to LTH is entities aging into the LTH cohort. -Selling from short-term holders had been offsetting buying from long-term, but now long-term holders buying is offsetting short-term hodlers selling.” noted the analyst.
There could be two possible outcomes from this trend: consolidation or a replay of the 2018 bear market.
via ZyCrypto